Month: October 2018

US And North Korea Agree To Second Summit Meeting After “Productive Conversation”

In their first face-to-face meeting since President Trump abruptly canceled a visit scheduled for August, Secretary of State Mike Pompeo and North Korean leader Kim Jong Un reportedly spent “several hours” together on Sunday engaging in “productive” talks that represented “another step forward” in US-North Korea relations. and progress toward achieving the agreements from the Singapore Summit The talks also yielded a verbal commitment to schedule the long-anticipated second summit meeting, according to South Koren officials, which the two sides have been working toward since the close of the historic Singapore meeting. According to the Washington Post, Pompeo and Kim met for “several hours” before eating lunch together.

Pompeo

During their totally natural and not-at-all-staged lunch, Pompeo and Kim shared a meal that lasted more than 90 minutes while answering questions from journalists while seated at a large round table…

…both men insisted that it had been “so nice” to have had the opportunity to chat and that their talks had yielded “significant progress.”

“It’s good to see you again,” Pompeo told Kim as the two men shook hands for the cameras before lunch. The Secretary of State then put his hand on Kim’s shoulder and the pair smiled.

“Well, I am really pleased for this opportunity. After having a nice meeting we can enjoy a meal together,” Kim said as they walked down a hallway for lunch.

As they sat for lunch, Kim said, “It’s a very nice day that promises a good future for both countries.”

Pompeo said he had had a “great visit” and a “very successful morning”, adding that Trump sent his regards. Both men spoke through translators.

Several NK officials even told US journalists that they had no foreknowledge of Kim’s decision to dine with Pompeo, suggesting that it was an “off the cuff” decision.

Though a date has not been set, the New York Times reported that the US and North Korea had agreed to hold  summit “as early as possible”, citing the office of President Moon Jae-in of South Korea, which had been briefed on the meeting.

The Times, citing an anonymous official, reported that the trip was “better than the last time”, referring to Pompeo’s disastrous July meeting with Kim. Though the two sides remain far apart on several key issues:

An American official who accompanied Mr. Pompeo said on Sunday that the trip was “better than the last time,” referring to the secretary’s trip there in July, according to a pool report. But the official, who was not identified, added, “It’s going to a long haul.”

Despite the photo-ops and effusive praise shared between Pompeo and the North Koreans, the fact remains that there has been little to no progress made toward breaking the crucial diplomatic logjam preventing negotiations between the US and North Korea from moving forward. As the New York Times reminds us, the US is sticking to its demand that the North complete the process of denuclearization before economic sanctions can be lifted. Meanwhile, the North has insisted again and again that it isn’t willing to surrender its nuclear weapons until it is completely convinced that the safety of the regime can be ensured, which is an extremely amorphous benchmark.

Pompeo

In a tweet published late Sunday, President Trump said he looks forward to “seeing Chairman Kim again in the near future.”

 

 

South Korean officials and some experts quoted by the Times suggested that the US is going down a “dead end” and that, instead, it should start by holding NK to its promise to dismantle the Yongbyon nuclear complex and worry about creating a nuclear inventory, a necessary precursor to verification, to a later date.

If the United States insisted that North Korea provide a full nuclear inventory and submit to time-consuming verification first, the negotiations will derail again as they did in the past, some analysts warned.

“Going down that road is a dead end,” Siegfried S. Hecker, a former director of the Los Alamos National Laboratory, who has visited North Korea several times, said during a lecture in Seoul on Sept. 27.

Instead, he said the two sides must start with risk-reduction steps, like dismantling the Yongbyon complex, and leaving the difficult and time-consuming verification to a later phase of denuclearization, when the two sides have gained mutual confidence in each other.

Foreign Minister Kang Kyung-wha of South Korea also raised the idea of leaving inspection and verification to a later stage in remarks he made during an interview with the national broadcaster KBS on Sept. 21.

Still, there are no guarantees that the North will follow through with this promise, just as many suspect that the North’s decision to close its nuclear testing facility, a decision that was widely heralded as a breakthrough by the US media, was in reality a gesture of convenience, since the facility had already been destroyed. As relations between the US and China continue to deteriorate, it’s difficult to imagine the North defying its primary benefactor to gamble on warmer relations with the US. More likely, this is just the latest in a series of stalling tactics, as the North hopes to secure whatever concessions it can before the end of Trump’s term.

And, of course, there’s still the possibility that, once Pompeo has left the North, the regime could change their story and once again denounce the US for making “gangster-like” demands, like they did after Pompeo’s previous visit in July.

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Trump: “Angry Mob” of “Radical Democrats” Has Become “Too Extreme And Too Dangerous To Govern”

President Trump on Saturday touted a conservative victory after his Supreme Court nominee, Brett Kavanaugh, was confirmed as the 114th Justice after a contentious and dramatic assault from the left. 

Speaking in Topeka, Kansas, Trump framed the Democratic resistance to Kavanaugh as an attempt by an “angry mob” to hijack the proceedings “in their quest for power.” 

“They threw away and threw aside every notion of fairness, of justice, of decency and of due process,” Trump said of the anti-Kavanaugh efforts. “What he and his wonderful family endured at the hands of Democrats is unthinkable, unthinkable.“

“Just imagine the devastation they would cause if they of their obtained the power they so desperately want and crave,” Trump added. “You don’t hand matches to an arsonist and you don’t give power to an angry left-wing mob, and that’s what they have become.” 

Trump then used Kavanaugh’s example to illustrate why conservatives need to vote during the midterm elections in four weeks so that Democrats don’t take back the House: 

“You have to vote,” Trump insisted. “On November 6 you will have the chance to stop the radical Democrats — and that’s what they have become — by electing a Republican House and a Republican Senate. We will increase our majorities. We need more Republicans. We need more Republicans.” 

“The Democrats have become too extreme and too dangerous to govern,” Trump continued. “Republicans believe in the rule of law not the rule of the mob.”

Bonus: Feinstein impression

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Danske Bank – Who Helped Them Launder?

Via Golem XIV’s blog,

A couple of days ago the always good Francis Coppola wrote a piece for Forbes entitled,

The Banks That Helped Danske Bank Estonia Launder Russian Money

In it she made the simple but essential point that  while Danske Bank, through its Estonian branch, had laundered $234 billion,

…Danske Bank Estonia couldn’t do this by itself. Much of the money was paid in U.S. dollars, and for that, it needed help from other banks. Banks that had access to Fedwire, the Federal Reserve’s electronic settlement system. Big banks, in other words.

Coppola then named the banks involved.

J.P. Morgan, Bank of America and Deutsche Bank AG all made dollar transfers on behalf of the Estonian branch’s non-resident customers. And according to the Wall Street Journal, Citigroup’s Moscow branch may have been involved in some financial transfers in and out of Danske Bank Estonia.  (bold emphasis added by me)

So, Bank of America, Deutsche Bank and J.P. Morgan moved money OUT of Danske and in to dollar denominated accounts elsewhere, (see section 19 of Danske’s internal investigation). but that is only half the story. It leaves the huge unanswered question,

who moved the money in to Danske Bank’s Estonian branch in the first place?  

The accounts through which the money was laundered are non-resident accounts.  Non-resident simply means the people or entities which hold the accounts do not live in Estonia. So how did these non residents deposit their money in Danske’s Estonia branch?  Either they physically transported $234 billion dollar’s worth of their local currencies in trunks and suitcases from their own country, in to Estonia and to the bank, or it had to have been deposited electronically. Which would mean some other banks, in addition to those mentioned by Forbes, were involved.

So are there more banks than just the four listed in the Forbes article who had and perhaps still have relationships with Danske bank and who therefore could have (I’m not accusing anyone),  wittingly or unwittingly moved the money into Danske’s Estonian branch?

Ah, the joys of the internet.  Here is the list of Danske Bank ‘s Correspondent banks as of today.  (A note for all the lawyers, I am certainly NOT suggesting any of these banks laundered money. I am merely noting that it isn’t just the four banks mentioned in the Forbes article that routinely helped Danske move money around.)

For those who might not know, a correspondent bank is simply a bank that your bank has a working relationship with. So J.P.Morgan was Danske’s correspondent bank in the US. The relationship is often a bigger more international bank, which is licensed  in many countries, providing services to a smaller more regional or local bank.  But its important not to see this Correspondent relationship as being all one way.  By having a relationship the larger bank not only gets a fee for its help but becomes the international conduit for the money that its owner wishes  to move out of the small bank and its country of origin into the wider global market.

The lists of Danske’s correspondent banks shows 16 countries and territories:  Australia/New Zealand, Belarus, Canada, Switzerland, The Czech Republic, Europe, Great Britain, Hong Kong, Hungary, Japan, Norway, Poland, Russia, Sweden, Singapore, and the USA .    Bear in mind that some of these countries might be where the laundered money was coming from and some might be where that money was hoping to get to.

At the risk of insulting people when I look for the countries where the money might have been coming from I see the Czech Republic, Belarus, Russia and maybe Poland.

In the Czech Republic Danske’s correspondent bank is Obchodni Bank.  It is the largest bank in the republic but is actually majority owned by KBC Bank, part of KBC Banking and Insurance Group which  is one of Europe’s largest financial houses and it’s Belgian.  So perhaps the Belgian authorities should be concerned?

In Belarus the Correspondent bank is Priorbank JSC. This is a billion and a half euro bank, with 760 000 customers. It is in fact 87.74%  owned by Raiffeisen Bank of Austria. Now Raiffeisen and I have form, so I have to be careful here.  The link is to an article about money laundering which I wrote called “How to make the truth illegal’. What I can say is that not only does Raiffeisen’s name come up in the Magnitsky laundering case, it also comes up centrally in the infamous money laundering scandal  in which $1.2 billion was looted and laundered from Kyrgyzstan.  The best investigation of this affair I know of concluded,

…the suspicious transactions went through many banks around the world, with the largest amounts passing through Citibank in New York, the UK’s Standard Chartered and Austria’s Raiffeisen Zentralbank. These banks continued their relationship,… (My emphasis)

So perhaps the Austrian authorities should take a little look too?

In Poland Danske has its own banking network.

In Russia, where it has been assumed that most of the dirty money came from, Danske’s correspondent bank is Russia’s Central Bank.  Although things do get awfully wiggly in Russia I still think the Central Bank is an unlikely accomplice.

Danske does have its own presence in Russia. So it could have taken the dirty money directly into its own Russian subsidiary and moved it to Estonia all by itself.  But according to its web site it has only  60 employees in all of Russia so they would have been terribly busy and even they MIGHT have noticed something was odd about $234 billion coming in and going straight back out.  I also doubt every crook lined up at the same teller window week after week.

This seems to leave us with the four banks mentioned by Forbes. If so, then all the money that was laundered from Russia would have had to have been transferred into Danske by Deutsche and CITI. The other two banks which the Forbes article mentions, J.P.Morgan and Bank of America, only moved the money out, not in.  Now while I think this is entirely possible, given the feats of laundering that both Deutsche and CITI have achieved before, that they could have done it all themselves, it seems naive not to at least look to see if there were other banks involved in Russia.  So I did.

And what I found is that there is a second, larger list of correspondent banks. You get to it through the part of Danske’s web site that deals with Transaction Banking. For those of you aware of trends in Money Laundering the mention of ‘Transaction Banking’ might have started a red light flashing. Transaction or Electronic Laundering, uses fake on-line sales and is the fastest growing method of laundering.  One recent estimated is that $200 billion a year of transaction laundering occurs in the US alone.

Here is the link to the larger list.

It’s laborious to use but it reveals that several other large European banks have ties to Danske and help it to move money.

It turns out there are other banks in Russia that Danske does business with, namely Alfa Bank and Zao Unicredit Bank.

Alfa is a strange one. On the one hand Global Finance Magazine has repeatedly called it Russia’s Best Bank. On the other it has had a strategic alliance with GazProm.  America sees Gazprom as the Dark Lord Putin’s One Ring, binding European countries to its Gas supply.  Alfa has also been at the centre of the whole Trump/Russian dossier storm. And as if that wasn’t enough in December 2017, Alfa Bank’s wholly owned Dutch subsidiary, Amsterdam Trade Bank, was raided in connection with an investigation into possible money-laundering.

Zao Unicredit Bank is part of the sprawling trillion euro Italian Bank Unicredit. So this brings Italian Banking  in to our story. But it is worth remembering, however, that Zao used to be part of Bank Austria.  It was renamed when Unicredit bought Bank Austria. A purchase which, I have been told by one who worked in UniCreidt, pissed off Austrian bankers something rotten.

UniCredit still owns Bank Austria which means an Italian Bank, owns the third largest bank in Austria.  So Zao not only brings Italian banking in to the picture but links a second Austrian bank to Danske.

Danske also has partner banks in Serbia. One is Erste Bank AD Novi Sud, which is  part of Bank Erste – which is the largest bank in … Austria.   Another is RaiffeisenBank Ad Beograd. So now we have all three of Austria’s largest banks tied to Danske.  No other country has all three of its biggest banks all tied to Danske.  Might we being to wonder if there is something about Austria?

Not to be outdone The Italians are there too. Banc Intesa AD Beograd is one of the largest banks in Serbia but is 93% owned by another huge and ailing Italian bank Intesa Sanpaolo.  And UniCredit Bank Serbia works with Danske.  But again Unicredit Bank Serbia was part of Bank Austria. So is this an Italian or another Austrian connection?

Ukraine is on the list too.  Another country that routinely crops up in Money Laundering and political/banking corruption stories. In Ukraine we have Raiffeisen Bank Aval and UniCredit Bank LLC Kiev. And once again the UniCredit subsidiary used to be Bank of Austria. Hmm.

In Croatia we find among others, RaiffeisenBank Austria and  Erste & Steiermärkische Bank. While Societe General makes an appearance for the French.

In Bosnia we again have, one again, Raiffeisen and Unicredit.

While in Kazakhstan we have HSBC flying the flag for British Money Laundering banks. (Not that I’m suggesting AT ALL that HSBC might ever do anything shady in Kazakhstan).

And if we look for Middle East connections there is Banque Saudi Fransi which is Credit Agricole and Saudi British Bank which is 40% HSBC.

All of which amounts to what?  There is nothing criminal or even unusual in various banks having relations with Danske. All banks have relations with each other. But is there a pattern? There is a close connection between Dankse and all three of Austria’s largest banks and both of Italy’s largest , in countries that we might not wholly unfairly suspect of being a possible source of dirty money Is this something regulators might think important?

Russia, Bosnia, Belarus, Croatia, Serbia and Ukraine, all linked to Danske by the same Italian and Austrian banks.  And it is certainly fair to say that Austria has been a favourite place for Ukranian Oligarchs to park their billions.

Absolutely nothing I have said here is evidence of any wrong doing. But if you have a bank, Danske Bank in Estonia, which is at the centre of a vast laundering scheme surely you don’t just look at the banks that moved the money out of Estonia into dollar accounts? That is only the back half of the laundering.  Surely you should look for any banks that could have begun the laundering. And surely a reasonable pace to start, if only to rule them out, is the list of banks which Danske itself says are the banks it has close money-moving ties to?

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Everything You Know About State Education Rankings Is Wrong: New at Reason

You probably think you know which states have the best and worst education systems in the country. If you regularly dip into rankings such as those published by U.S. News and World Report, you likely believe schools in the Northeast and Upper Midwest are thriving while schools in the Deep South lag. It’s an understandable conclusion to draw from those ubiquitous “Best Schools!” lists. It’s also wrong, write Stan Liebowitz and Matthew L. Kelly in the latest issue of Reason.

View this article.

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China Cuts Reserve Ratio, Releases 1.2 Trillion Yuan Amid Rising Trade War, Record Defaults

China’s central bank announced it would cut the Required Reserve Ratio (RRR) for most banks by 1.0% effective October 15 for the fourth time in 2018, a little over three months after the PBOC announced a similar cut on June 24, as Beijing seeks to stimulate the slowing economy amid the growing trade war with the US, a slumping stock market, a sliding yuan and a record number of bond defaults.

The People’s Bank of China announced on Sunday local time that it lowered the required reserve ratio for some lenders by 1 percentage point according to a statement on its  website. The cut, which will apply to a wide range of banks including large commercial banks, joint stock commercial banks, city commercial banks, non-county rural banks and foreign banks, will release a total of 1.2 trillion yuan ($175 billion), of which 450 billion yuan will be used to repay existing medium-term funding facilities which are maturing, and the remaining RMB 750bn will help offset the seasonal rise in liquidity demand during the second half of the month due to tax payments, according to the PBOC.

But the real reason behind the RRR cut is that it is intended to boost sentiment before the onshore equity market re-opens on Monday after the week-long holidays, as well as to support liquidity conditions at a time when global interest rates have suddenly spiked to multi-year highs..

Commenting on the cut, Goldman economists said that while they had been expecting one RRR cut per quarter in H2, “the 1pp magnitude surprised us on the upside.”

To some, the RRR cut was expected: Karine Hirn, from East Capital in Hong Kong, said that “weaker PMI, negative development in U.S.-Sino tensions, poor weekly performance in Hong Kong during the past week while the onshore equity markets were closed made most investors expect some kind of supportive announcement over the weekend ahead of the reopening on Monday.”

And, never one to disappoint markets, the PBOC delivered right on schedule.

Concerned about the US response to what will be perceived as its latest easing action, one which could lead to further yuan devaluation, the central bank argued in a separate statement that the move won’t affect the overall amount of liquidity in the economy, as it substitutes for existing instruments, and the remaining money will offset the tax-payment pressure in mid-to-late October. Additionally, the PBOC claimed that the cut won’t put depreciation pressures on the currency, although it is unclear if the US will accept that explanation at a time of escalation economic and geopolitical tensions between the two nations.

China’s central bank has been reacting to the cyclical slowdown that’s been worsened by Beijing’s anti-debt campaign and the building trade conflict with the U.S. As a result, the PBOC has maintained an accommodative monetary policy even as the yuan has continued sliding. However, the effects of Chinese policy support plus tax cuts and increased infrastructure funding have yet to fully filter through though, and economic momentum continued to lose pace in September, with the Caixin manufacturing PMI last week dropping to 50, ending 15 months of expansion and the lowest level since May 2017, while the official PMI recorded its first September drop since the PMI series was released. Reflecting the escalating trade war with the US, new export orders fell to the lowest reading since 2016.

“China’s monetary policy is still prioritizing domestic economic problems, despite the escalating trade war and Federal Reserve tightening,” said Ming Ming, head of fixed income research at Citic Securities Co. in Beijing. “The reduction will help ease domestic financing difficulties,” he said.

The RRR cut also comes at a time when China’s deleveraging campaign has resulted in a record number of bond defaults. According to Goldman, just in August and September of this year, there had been no less than 8 new defaults, a troubling trend “despite the introduction of a number of policy loosening measures in early July.” This compares to only 11 new defaults between January and July this year, with all the recent defaults coming from privately owned enterprises.

The recent cluster of defaults has brought the number of new defaults this year to 19, surpassing the previous full year record of 18 defaults recorded in 2016. In terms of the notional amount of bonds that defaulted, it has reached RMB 91.4bn, equivalent to 0.5% of corporate bonds outstanding at the start of 2018, and 69.6% higher than the RMB 53.9bn recorded for all of 2016.

The increased liquidity from the RRR cut will help support slowing bank lending and credit, and unlike the PBOC’s medium-term funding tools, it is permanent “which can help banks’ liquidity expectations”, said Wang Tao at UBS. The cut gives the market a stronger easing signal and can support sentiment, which has been negative on China and emerging markets in the past few days, she said quoted by Bloomberg.

In addition to the slowdown on the economy and in aggregate lending, as well as the decline in the stock market and the rising defaults, trade war has been a key risk for Chinese policymakers. The lack of progress in negotiations between Washington and Beijing over their trade rivalry means that there’s a good chance the current roster of tariffs on $250 billion of Chinese goods exported to the U.S. will grow, as President Trump has threatened. The US imposing tariffs on all Chinese imports is now the base case for both JPMorgan and Goldman Sachs. With little room for optimism on external demand, the outlook for China’s economy hinges increasingly on the effectiveness of targeted stimulus measures being rolled out this year.

Meanwhile, with Chinese markets shut last week due to holidays, the onshore currency hasn’t traded, although in that time the the offshore yuan has lost almost 0.3% of its value against the dollar as turmoil from sharply higher rates has hit global markets.

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Authenticity and Truth in the #MeToo Era

Supreme Court nominee Brett Kavanaugh has been accused of sexual misconduct ranging from flashing to attempted rape. Some of the accusations were the subject of widely televised testimony in the Senate last week. Conventional wisdom now holds that it was Kavanaugh’s personal performance during this testimony—not the believable but unprovable allegations of his first accuser, Christine Blasey Ford—that tanked the judge’s credibility among the persuadable.

Those who have been swayed against Kavanaugh cite his vague and sometimes implausible answers about his high school and college life outside of the alleged assaults. They argue—in tweets, essays, explainers—that his shiftiness should serve as a mark against him, even if it’s not necessarily evidence that he’s guilty of sexual violence. That he may not have lied outright, but his evasive and emotional performance was still potentially disqualifying.

Whatever more serious things Kavanaugh may or may not be guilty of, his antics inspired suspicion that the perfectionist public persona was but an exquisitely constructed mask. Kavanaugh’s credibility crisis isn’t about belief (or lack thereof) in any particular set of facts but a perceived absence of authenticity in the nominee overall.

Perception Is Everything

What exactly is authenticity? For some time, it’s been a powerful buzzword. Social media marketers, millennial whisperers, politicians, and restaurants all touted it. We were told that authenticity was what hot demographics were craving and missing—in their lives, their processed meats, their travel experiences, their “news brands.” It was the key to selling yourself as an “influencer.” It was the key to winning elections.

But authenticity is a fuzzy concept. Hillary Clinton has always suffered from a lack of perceived authenticity, even among people who would also describe her as honest. Meanwhile, President Donald Trump is often credited with an abundance of authenticity—a man who calls it like he sees it—even among those who admit that he’s not always 100 percent truthful. Instagram stars can have authenticity even while shilling and staging and posing. So too for celebrities whose stage-managed endeavors strike the right notes.

Authenticity isn’t related so much to universal truths as loyalty to your inner truth—an honesty about who you are and where you’re coming from. Being authentic only implies being worthy of belief that you are indeed authentic.

Authenticity is as authenticity is perceived.

The Anatomy of Gray Areas

Authenticity—or a lack of it—lurks in many recent “gray area” discussions around sex and relationships. Take this recent piece, published by the feminist site Jezebel, about a former editor at the millennial progressive publication Mic.

The editor, Jack Smith IV, had built a high-profile career exposing right-wing “fascists” and championing social justice causes. But the article alleges that in private, Smith was far from the feminist-minded good guy he had built his public brand on. Shortly after the article came out, Mic placed Smith on temporary paid leave; he was fired a few weeks later.

The author of the Jezebel piece, Julianne Escobedo Shepherd, lays out a litany of Smith’s alleged abuses against women he dated or hooked up with, including telling one woman he wouldn’t have sex with her unless she wore specific eye makeup and berating another for hours because she said she was slightly younger than she was. For the most part, it’s the kind of stuff that falls into the category of caddish, lame, or unsavory behavior without being criminal—the so-called gray areas.

Only two of the article’s many allegations about Smith include claims of non-consensual acts. One woman accuses him of foregoing a condom without her permission during (otherwise consensual) sex. She also says that during the sex, Smith “wrapped his bicep around my neck and restricted my breathing,” ignoring her when she asked what he was doing. In neither instance, however, did she tell him to stop, according to this article. Their relationship continued “for several months.”

One of the charges lobbed against Smith is that he had sex with a woman after she explicitly consented to it, told him to get a condom, and told him to be rougher. She alleges that she only did those things because she was feeling insecure and guilty. This is presented not as a story about women struggling with sexual assertiveness but as a failing on Smith’s part.

Throughout the piece, Shepherd pivots between positioning it as a big-picture story about sex and power and a particularized case against Smith. Ultimately, both frames feel incomplete. What can we really take away here, other than that Smith seems like a drag to date? The author shies away from providing a coherent model of consent and good sexual etiquette. “Manipulative behavior and sexual coercion of the type Smith is accused is notoriously difficult to define,” she writes.

Ultimately, Smith’s real sins seem to be less about specific boundaries crossed than about how his alleged treatment of women doesn’t match the feminist airs he put on in public. It’s an alleged authenticity deficit that doomed him.

At least some jerks have the honor to be authentic about who they are. Perversely, these types are generally better positioned to weather exposure of bad behavior. Meanwhile, the hypocrisy of sneakier jerks adds fuel for the flaming pitchforks.

The Wisdom of Villains

Another recent authenticity-crisis casualty was Ian Buruma, editor until last month of The New York Review of Books. This time, it wasn’t Buruma’s own authenticity that was called into question; it was an article he published by the former Canadian radio host Jim Ghomeshi.

In 2014, Ghomeshi was fired from his job and declared a pariah in the media after nearly two dozen women accused him of not respecting boundaries during sexual encounters. A court indicted, then acquitted, him on charges in six of these cases. He settled with one accuser out of court.

Buruma said he accepted the Ghomeshi essay because he was interested in hearing from someone on the far side of public disgrace. But it failed to include some key facts and was widely seen as an inauthentic attempt at rehabilitation that The New York Review of Books should not have published.

In post-publication interviews, Buruma posited that we need neither moral purity nor authenticity from someone to learn from them. Buruma told Slate he was interested in what it was like being “at the top of the world…and then finding your life ruined and being a public villain and pilloried. This seemed like a story that was worth hearing—not necessarily as a defense of what he may have done.” Critics retorted that no form of the essay would have been acceptable.

Personally, I agree the piece left much to be desired. But I also think Buruma was on to something. There can be value in the wisdom of villains.

Around five years ago, a person who helped get me through one of the roughest periods of my life was concurrently going through his own Jack Smith IV–style fall from Male Feminist hotshot to disgraced creep. Unlike Smith (who has been basically missing online since the Jezebel story came out), this man couldn’t shut up about it, chronicling his job losses, marital breakdown, and mental-health decline in an alarmingly public and realtime fashion.

I never suffered any delusions about his moral culpability—most of the things causing crowd consternation came from his own past writing. He had been given a pass for past transgressions by confessing them and claiming to be redeemed. But this redeemed self was at best an idealized vision he tried and failed to live up to, at worst a calculated deception designed to optimize his online brand and predatory potential. The feminist internet in which I lurked and worked then was in a tizzy over which it was, how he pulled off the con, and who had enabled him.

I reached out directly. I wanted to know something beyond the tweets. I wanted to understand, or at least glean more data for my analysis about how someone could so loudly preach one thing and live another. I was curious, supremely bored, and going through a career, relationship, and all-around rough patch. I was feeling down. Then depressed. Then worse.

For a brief but intense time, we struck up a strange long-distance friendship. What started as an amused bid to ascertain his authenticity became something darker, weirder, more desperate. He slipped in and out of the hospital, headlines, and social media mobs. I imbibed him as a much needed distraction, puzzle, mentor, monster, and cautionary tale.

I never did make much headway on getting to any truth about him. But that had ceased being the real point. I had needed help and (though I didn’t consciously think of it like this then) seized upon him because I supposed he had both experience and no room to judge.

In the five years since I watched along online as he lost almost everything, I’ve watched him build a new life, one that revolves around his kids, therapy, working at a grocery store, adoring his new girlfriend, staying out of the spotlight, and staying humble. Is this the work of a master sociopath, or a once-again redeemed man?

We all like to think we can tell the bullshitters from the genuine believers and repenters. We use these wispy calculations to get to what’s often considered the crux of the redemption issue: Have they earned it? Do they really deserve another chance? Certainly, no one is owed an opportunity to plead their comeback case. Yet “platforming” them isn’t really the problem so much as failing to put what they have to say in proper context.

I want editors, curators, and gatekeepers who are better and smarter than the con men. But also ones open to the possibility that sometimes, the con men can still teach us about ourselves.

Authenticity vs. Truth

There’s much talk lately about who deserves a second chance and how to tell when they do. Some folks almost everyone agrees do not deserve it—your Harvey Weinsteins and Bill Cosbys. Those who commit violent or myriad crimes. Whether Brett Kavanaugh falls into this category remains an open question.

But what about Jack Smith IV? Aziz Ansari? Louis C.K.? Al Franken? Avital Ronell? These “gray area” perpetrators present more room for debate. Here, authenticity becomes central, perhaps even more so than the truth of the specific accusations. Is their repentance really sincere? How do we square the now with the then?

Not even those specifically trained to tell truth from lies—judges, police, etc.—do much better than anyone else at it. What hope, honestly, do the rest of us have? Outside the cases where someone is caught in the act of contradicting his own redemption narrative, it’s an unfalsifiable proposition.

You can drive yourself crazy trying to know for sure what’s in someone else’s heart. You’ll still fail. Luckily, forgiveness can be as much about what we owe ourselves as what someone else deserves.

Forgiving someone—friends, lovers, public figures, internet strangers—doesn’t mean you need to hang out with them or support their work. It’s a means of letting go of the corrosiveness of harboring hatred. Relinquishing the idea that there are tell-tale gives about the state of someone’s soul if you just watch closely enough.

Accountability and authenticity are important, but they’re not everything. And whether we’re talking about personal growth or social change, focusing too much on parsing particular motives and taking down individual enemies can get in the way.

A more productive moral imperative is getting at the underlying systems that allow bad actors in your own world or the world at large to thrive. But this is hard to come by in a culture intent on making people pay in perpetuity for their interpersonal failings. Right now, the media are too eager to draw lines in permanent marker around both villains and victims, while the rules for each category are scribbled in disappearing ink.

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“Bankrupt” UN Budget: Who Hasn’t Paid Their Dues?

Having been accused of ‘moral bankruptcy’ by US officials, The United Nations appears to be heading for fiscal bankruptcy as, earlier this summer, UN chief Antonio Guterres has warned staff that the world body is running out of cash and urged member states to pay what they owe as soon as possible.

But it appears Guterres’ warnings went unheeded by many, as Statista’s Sarah Feldman notes that as the United Nations concludes its two weeks of annual meetings in New York, some states remain timelier with their annual payments than others.

By the end of the on-time payment period in February, only about a third of countries paid their dues in full.

Seven months later about two thirds of member states have made their payment to the regular budget. All permanent members have made their full regular payments, except the United States.

Infographic: UN Budget: Who Has Paid Their Dues? | Statista

You will find more infographics at Statista

President Trump has routinely complained about the alleged skewed payment of United Nations dues system, where the U.S. pays 22 percent of the overall regular budget. All member states are legally required to make payments to both the regular budget and the peacekeeping budget, two separate budgets with two different payment calculations. The UN considers gross national income, population, and debt burden when coming up with its operational budget.

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German Coalition Agrees To Seek “Skilled Migrants”

Authored by Soeren Kern via The Gatestone Institute,

  • The new immigration law is a tacit admission that Chancellor Angela Merkel’s open-door migration policy, which has allowed into Germany more than a million mostly unskilled migrants from Africa, Asia and the Middle East, has failed to resolve the country’s most pressing demographic challenges and labor shortages.

  • “We are creating the framework for more controlled immigration of qualified specialists.” — Interior Minister Horst Seehofer.

  • By the middle of 2018, only a quarter of those who arrived during the migrant crisis had found a job and only a fifth were paying into the social welfare system, according to the Institute for Employment Research. Most of those who were employed had low-paying jobs, and many of them were receiving supplementary welfare benefits to make ends meet.

Germany’s Minister of Labor Hubertus Heil (left), Economic Affairs Minister Peter Altmaier (middle) and Interior Minister Horst Seehofer (right) present the government’s immigration policy framework for skilled workers, at a press conference on October 2, 2018 in Berlin, Germany. (Photo by Sean Gallup/Getty Images)

After months of wrangling, Germany’s coalition government has reached an agreement on the key points of a new immigration law — one that is aimed at filling labor shortages and stabilizing the public pension system by encouraging the immigration of skilled workers from outside the European Union.

The new law, which will tighten restrictions on the immigration of unskilled workers, is a tacit admission that Chancellor Angela Merkel’s open-door migration policy, which has allowed into Germany more than a million mostly unskilled migrants from Africa, Asia and the Middle East, has failed to resolve the country’s most pressing demographic challenges and labor shortages.

Interior Minister Horst Seehofer (CSU), Labor Minister Hubertus Heil (SPD) and Economic Affairs Minister Peter Altmaier (CDU) presented the compromise agreement during a joint press conference in Berlin on October 2.

The so-called Fachkräftezuwanderungsgesetz (Law on Immigration of Skilled Workers) would waive existing requirements for companies to give preference to German or EU citizens when filling job vacancies. Specifically, it would allow companies to recruit non-EU (Drittstaaten) citizens in all economic sectors, provided that those recruits are qualified for the job and have satisfactory German language skills.

Even lower requirements would apply for information technology professionals, who would be allowed to come to Germany without formal academic qualifications, provided they have solid work experience and a job offer.

The new law would also provide skilled workers without concrete job offers a six-month residence permit to find a job, provided they have German language skills and the financial means to support themselves during this period.

On the other hand, the proposed law states that non-EU citizens without higher education will not be allowed to migrate to Germany: “We do not want any immigration from unqualified third-country nationals,” the deal states.

“We will ensure through clear criteria that the rules cannot be abused. We will align our efforts with the needs of our economy, taking due account of qualifications, age, language skills, evidence of a real job offer and the ability to guarantee livelihoods.”

The agreement does not specifically mention the so-called Spurwechsel (“lane change”) proposal, a plan championed by the SPD that would allow migrants living in Germany to exchange their asylum seeker status for permanent residency status if they find a job and learn German. “We maintain the principle of separation of asylum and labor migration,” the document states. “We will prevent immigration into the social welfare system.”

Seehofer and others said they feared that the “lane change” proposal would reinforce the immigration pull factor, thereby further encouraging unskilled economic migrants to travel to Germany in the hopes of being allowed to stay. “We had a silent consensus that there should be no lane change,” said Seehofer.

In a compromise, however, the deal commits the government to “define clear residence criteria” for so-called Geduldete (“tolerated”) migrants: well-integrated refugees whose asylum applications have been rejected but who cannot be deported because they lack identification papers, their home countries refuse to take them back, or there is legitimate fear for their safety once home. Currently, there is no unified policy on Geduldete migrants; some of Germany’s 16 federal states are showing leniency while others are taking a hard line.

Seehofer said he was “extremely satisfied” with the results and described the agreement as a “pragmatic, practical response to the reality of life.” He added: “We are creating the framework for more controlled immigration of qualified specialists.”

Labor Minister Heil said the agreement represented the first step for a “modern immigration law in Germany.”

Economic Affairs Minister Altmaier said that the deal would “ensure that all jobs for skilled workers can also be filled.”

By contrast, the leader of the anti-immigration party Alternative for Germany (AfD), Alexander Gauland, said that the compromise on the so-called lane change proposal would encourage more illegal immigration:

“With the new immigration law, the SPD has once again prevailed against Seehofer. Asylum and immigration are now being mixed beyond recognition and the opportunities to escape deportation are massively expanded.

“This is now officially what the AfD has always warned: As soon as illegal immigrants have crossed our borders, they may stay with us forever.”

Business leaders praised the deal. The chief executive of the Confederation of Employers’ Associations, Steffen Kampeter, said that the German economy “relies on qualified specialists from abroad” in order to maintain competitiveness: “We need the brightest brains from all over the world.”

The president of the Federal Association for Information Technology (Bitkom), Achim Berg, said there currently are about 55,000 job vacancies in the IT sector, costing German companies about 10 billion euros in lost sales each year:

“Bitkom has been campaigning for years for the immigration of skilled workers. We very much welcome the fact that this is now fundamentally addressed by the federal government with the Law on Immigration of Skilled Workers. We need the brightest minds from around the world to shape digitization in Germany, to support our economy and to strengthen the labor market.”

Germany will need to take in 300,000 migrants annually for the next 40 years to stop population decline, according to a leaked government report. The document, parts of which were published by the Rheinische Post, revealed that the German government is counting on permanent mass migration to keep the current size of the German population (82.8 million) stable through 2060.

The report implied that Chancellor Merkel’s decision to allow into the country some 1.5 million mostly Muslim migrants between 2015 and 2016 was not primarily a humanitarian gesture, but a calculated effort to stave off Germany’s demographic decline and to preserve the future viability of the German welfare state, in which the young are obligated support the elderly.

The report stressed the need quickly to integrate migrants into the workforce so that they can begin paying into the social welfare system. “According to past experience, this will not be easy and will take longer than initially often hoped,” the report conceded. “Successes will only be visible in the medium to long term.”

By the middle of 2018, only a quarter of those who arrived during the migrant crisis had found a job and only a fifth were paying into the social welfare system, according to the Institute for Employment Research (IAB). Most of those who were employed had low-paying jobs in the hospitality or services sectors, including in cleaning, package delivery or security, and many of them were receiving supplementary welfare benefits to make ends meet.

In August 2018, Deutschlandfunk public radio reported that “disillusionment has arrived” as many refugees are still receiving social welfare benefits or working in the low-wage sector:

“‘First refugees, then ‘German craftsman,’ ‘Young, alone and motivated,’ ‘People come to work hard,’ ‘Refugees are lucky.’ This is what the headlines sounded like in the summer of 2015, when images of the German welcome culture were seen around the world. The welcoming teddy bears at Munich’s central station promoted the view that hundreds of thousands of young men from Syria, Afghanistan, Eritrea and Iran could solve several problems in one go — rejuvenate aging German society and alleviate the skills shortage.

“Three years later, the headlines sound sobering: ‘Job miracle among migrants is missing,’ ‘Where are the specialists?’ ‘Most of the refugees live on Hartz IV [unemployment benefits],’ ‘The high burden of refugee policy.’

“Was Germany naïve in summer 2015? Did policymakers and experts see the situation from too rosy a perspective and forget that integration into the labor market is a long, sometimes rocky path? ….

“Only one out of every 100 refugees is working in a highly skilled job in Berlin. Nationwide, 8 out of 10 asylum seekers have neither a university degree nor a vocational qualification….”

In another segment entitled, “No New German Economic Miracle in Sight,” Deutschlandfunk reported:

“The German economy needs skilled workers: When almost one million refugees came to Germany in 2015, hopes of the big corporations were aroused. But what role do the 30 DAX [blue chip stock market index consisting of the 30 major German companies trading on the Frankfurt Stock Exchange] companies play in integrating into the labor market?

“Deutschlandfunk conducted a survey — the result is sobering: only 800 refugees have been recruited by DAX companies. Most of them work at Deutsche Post — especially in parcel sorting centers or as couriers — and also at the carmakers BMW and Daimler. But: The majority of stock market heavyweights has not hired any migrants….”

Company executives said the main problem is that migrants lack professional qualifications and German language skills.

According to the Federal Labor Office, the educational level of newly arrived migrants in Germany is far lower than initially expected: only a quarter have a high school diploma, while three quarters have no vocational training at all. Only 4% of new arrivals to Germany are highly qualified.

For now, the vast majority of migrants who entered Germany in 2015 and 2016 are wards of the German state. German taxpayers paid around €21.7 billion ($25 billion) on aid for refugees and asylum seekers in 2016, €20.8 billion in 2017, and will pay a similar amount in 2018, according to government figures published by Focus magazine.

A Finance Ministry document revealed that the migrant crisis could end up costing German taxpayers an additional €94 billion ($107 billion) by 2020. About €25.7 billion would be for social spending, such as unemployment benefits and housing support. About €5.7 billion would be destined for language courses and €4.6 billion for integrating refugees into the workforce.

Over the long-term, the 2015 migrant crisis could end up costing German taxpayers more than one trillion euros — the equivalent of around one-third of Germany’s current GDP — according to calculations presented by economist Bernd Raffelhüschen on behalf of the Market Economy Foundation (Stiftung Marktwirtschaft). He concluded:

“We need people, that is clear. But we need people we need. Which means: Germany needs an immigration limitation law. Only those who fit into the German qualification requirements may come. Other countries do that too. One must have the courage to discriminate, that is to select.”

Germany currently has more than 1.2 million job vacancies, according to the Institute for Employment Research (IAB). Of these, 440,000 are for skilled jobs, which, if filled, would increase German economic output by a full percentage point, according to the German Economic Institute in Cologne.

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US Rotates To Ukraine As Location To Start Conflict With Russia

Authored by Eric Zuesse via The Strategic Culture Foundation,

The United States Government is now treating Ukraine as if it were a NATO member, and on September 27th donated to Ukraine two warships for use against Russia. This is the latest indication that the US is switching to Ukraine as the locale to start World War III, and from which the nuclear war is to be sparked against Russia, which borders Ukraine. 

Here is why Syria is no longer the US alliance’s preferred choice as a place to start WW III:

On September 4th, US President Donald Trump publicly threatened Syria, Iran and Russia that if they exterminated the jihadists in Syria’s only remaining jihadist-controlled province, Idlib, then the US might launch a full-scale invasion against Syria, Iran and Russia in Syria. Either the US or Russia would then quickly escalate to nuclear war so as not to lose in Syria — that would be the conventional-war start to World War III. 

The leaders of Russia, Iran, Turkey, and Syria (Putin, Rouhani, Erdogan, and Assad), agreed in two meetings, one on September 7th and the other on September 17th, to (as I had recommended on September 10th) transfer control of Syria’s only remaining jihadist-controlled province, Idlib, to NATO-member Turkey. This action effectively prevents the US alliance from going to war against Russia if Russia’s alliance (which includes Syria) obliterates all the jihadist groups in the Al-Qaeda-led Syrian province Idlib. For the US to war against Russia there would also be war against fellow-NATO-member Turkey — out of the question. 

The US has been using Al Qaeda in Syria to train and lead the jihadist groups which have been trying to overthrow Syria’s Government and to replace it with a government that has been selected by the Saud family who own Saudi Arabia. Ever since 1949 the US Government has been trying to do this (to place the Saud family in charge of Syria). That plan is now being placed on-hold if not blocked altogether, because of the Russia, Turkey, Iran, Syria, agreement. As I reported on September 25th, “Turkey Now Controls Syria’s Jihadists”. The US would no longer be able to save them, but Turkey would, if Erdogan wants to. “Turkey is thus now balanced on a knife’s edge, between the US and its allies (representing the Saud family) on the one side, versus Russia and its allies (representing the anti-Saud alliance) on the other.” 

During the same period in which the US Government was setting Syria up as the place to start WW III, it was also setting up Ukraine as an alternative possibility to do that. US President Obama, in a very bloody February 2014 coup which he had started planning by no later than 2011, overthrew Ukraine’s democratically elected President, and replaced him by a rabidly anti-Russian racist-fascist regime whose Ukrainian tradition went back to ideologically nazi Ukrainian organizations that had supported Hitler during World War II. Though communism is gone from Russia ever since 1991, the US aristocracy never ended its goal of conquering Russia; the Cold War was secretly continued on the US-NATO side. Ukraine’s nazis (meaning its racist-fascists) are now the US and UK aristocracies’ chief hope to achieve this ambition of a US-and-allied global conquest. Here are the recent steps toward WW III regarding the US alliance’s new (since 2014) prize, Ukraine:

On September 28th, John Siciliano at the Washington Examiner bannered “Ryan Zinke: Naval blockade is an option for dealing with Russia” and he reported that Trump’s Interior Secretary Zinke had said “There is the military option, which I would rather not. And there is the economic option. … The economic option on Iran and Russia is, more or less, leveraging and replacing fuels.” He was saying that in order for the US to get its and its allies’ (mainly the Sauds’) oil and gas into Europe replacing some of Russia’s dominant market-share in that — the world’s largest energy-consuming — market (and also shrink Iran’s market-share there), a military blockade against Russia and Iran would be an option. Currently, most of Russia’s oil and gas into Europe goes via pipelines through Ukraine, which the US already controls. Siciliano’s news-break received a follow-up on September 30th from Zero Hedge.

On October 1st, George Eliason, the great investigative journalist who happens to live in Donbass, the southeastern part of Ukraine that broke off from Ukraine when Obama’s coup overthrew the democratically elected Ukrainian President who had received over 90% of the votes in Donbass, reported at The Saker’s site, that Ukraine’s war against Donbass was now returning in full force. Headlining “War Crimes in LNR and DNR [Donbass] —The Unannounced War”, he opened: 

On September 28th, Lugansk Peoples Republic (LNR)Deputy Foreign Minister Anna Soroka and Andrey Chernov gave a presentation unveiling a photo album entitled Unannounced war. This collection of 150 images details the war crimes by the Ukrainian government during the war from 2014-2018.

Over the last 4 years, many journalists including myself reported on the war crimes committed by Ukrainian punisher battalions and sometimes the Ukrainian army. These war crimes are privately funded by Ukrainian Diaspora groups led primarily by US and Canadian citizens.

The Ukrainian punisher battalions and Ukrainian volunteer battalions take pride in the fact there is no need to hide any of Ukraine’s crimes from the West’s prying eyes.

Even now, when there is supposed to be a ceasefire so the children can go to school, Kiev is shelling cities and towns across Donbass. On September 29th, in just 24 hours Ukrainian army units shelled DNR (Donetsk Peoples Republic) over 300 times violating the ceasefire.

The US Government is trying to bully Russia and its allies, and now is overtly threatening to go to a naval blockade against Russia. Those two warships that the US just donated to Ukraine could be helpful in such a blockade. Alternatively, Ukraine’s re-invasion of Donbass might become Trump’s opportunity to ‘aid a NATO ally’ and precipitate WW III from a conventional war in Donbass. Either way would likely produce from Russia a nuclear blitz-attack to eliminate as many of America’s retaliatory weapons as possible, so as to beat the US to the punch. In military terms, the side that suffers the less damage ‘wins’, even if it’s a nuclear war that destroys the planet. The side that would strike first in a nuclear war would almost certainly suffer the less damage, because most of the opponent’s retaliatory weaponry would be destroyed in that attack. Trump is playing nuclear ‘chicken’ against Putin. He is surely trying Putin’s patience.

If the US regime uses any of these entry-points to a conventional war, Russia would simply be waiting for the US to nuclear blitz-attack Russia, which the US regime has long been intending to do. Regardless which side goes nuclear first, the blockade and/or re-invasion of Donbass (repeating there such things as this and this) will have started WWIII. And, clearly, any survivors would likely view the US in the way that most of today’s world views the fascist powers in WWII: as having been the aggressors. Consequently, if the American people cannot first overthrow the US regime and establish an authentic democracy here, then WWIII seems likely to result, which would be an outcome far worse, for the entire world, than an overthrow of the government that the entire world considers to be by far the most dangerous on Earth.

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US Home Prices Hit Peak Unaffordability As Prospective Buyers Better Off Renting

With unaffordability reaching levels not seen in decades across some of the most expensive urban markets in the US, a housing-market rout that began in the high-end of markets like New York City and San Francisco is beginning to spread. And as home sales continued to struggle in August, a phenomenon that realtors have blamed on a dearth of properties for sale, those who are choosing to sell might soon see a chasm open up between bids and asks – that is, if they haven’t already.

While home unaffordability is most egregious in urban markets, cities don’t have a monopoly on unaffordability. According to a report by ATTOM, which keeps the most comprehensive database of home prices in the US, of the 440 US counties analyzed in the report, roughly 80% of them had an unaffordability index below 100, the highest rate in ten years. Any reading below 100 is considered unaffordable, by ATTOM’s standards. Based on their analysis, one-third of Americans (roughly 220 million people) now live in counties where buying a median-priced home is considered unaffordable. And in 69 US counties, qualifying for a mortgage would require at least $100,000 in annual income (Assuming a 3% down payment and a maximum front-end debt-to-income ratio of 28%). As one might expect, prohibitively high home prices are inspiring some Americans to relocate to areas where the cost of living is lower. US Census data revealed that two-thirds of those highest-priced markets experienced negative net migration, while more than three-quarters of markets where people earning less than $100,000 a year can qualify for a mortgage experienced net positive migration.

ATTOM illustrated this correlation between home affordability and net migration in the chart below:

Rising home prices have played a big part in driving home unaffordability, but they’re not the whole story. Stagnant wages are also an important factor. The median nationwide home price of $250,000 in Q3 2018 climbed 6% from a year earlier, which is nearly twice the 3% growth in wages during that time. Looking back over a longer period, median home prices have increased 76% since bottoming out in Q1 2012, while average weekly wages have increased 17% over the same period.

Instead of fighting to overpay for existing inventory, one study showed that, for now at least, most Americans would be better off renting than buying a residential property. According to the latest national index produced by Florida Atlantic University and Florida International University faculty, renting and reinvesting will “outperform owning and building equity in terms of wealth creation.”

However, with the average national rent at an all-time high, American consumers are increasingly finding that there are no good options in the modern housing market. Which could be one reason why millennials, despite having more college degrees than any preceding generation, are increasingly choosing to rent instead of buying, even after they get married and start a family.

Rents

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